World Trade Organization

The World Trade Organization

Renato Ruggiero, the first Director General of the World Trade Organization has described the international trade agreements that established the WTO as similar to a: “constitution” for the world economy.”  This catch phrase “accurately alludes to the constitutional function of limiting government authority.”  The trouble is that this is not a democratic constitution: it is one in which the interests of international capital in limiting governments’ authority to regulate trumps other values—including environmental values.

Prior to 1994, trade agreements dealt primarily with issues of discrimination against foreign imports in the form of tariffs, quotas, customs duties and other “at the border” measures. And, like most international agreements they were enforced primarily by diplomatic suasion. Post-1994, the WTO agreements and free trade agreements based on the same model, such as the proposed Trans Pacific Partnership trade agreement, by contrast can be enforced effectively. International tribunals may impose retaliatory trade sanctions, such as tariffs or loss of intellectual property rights.

The WTO agreements and post-1994 FTAs, also, focus on so-called nontariff barriers to trade, such as economic regulations, taxes, and economic development policies.  And, the WTO rules that restrain government action go far beyond simple issues of discrimination and seek to encourage international commerce by promoting deregulation, expansion of property rights, and principles of what might be described as “market fundamentalism.”  In other words, the agreements regulate governments – based on the assumption that government stands in the way of global prosperity that will result from relatively unfettered markets and capital accumulation. For example:

  • The WTO agreement on technical barriers to trade has been used by Mexico to successfully challenge the U.S. dolphin-safe tuna labeling program and by China to attempt to chill legislative initiatives in Vermont and Maryland to protect children from toxic toys.
  • The WTO agreements on trade in goods (the General Agreement on Tariffs and Trade) and the WTO agreement  on subsidies and countervailing measures been used to by the European Union and Japan to challenge the Canadian province of Ontario’s feed-in tariffs favoring renewable energy by providing guaranteed, above-market, long-term pricing for the generation output of wind and solar energy.

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